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Intro to Public Policy
Charles Scott Bell
Study Guide
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This 16 page Study Guide was uploaded by Reagan Porter on Saturday October 1, 2016. The Study Guide belongs to PUP 3002 at Florida State University taught by Charles Scott Bell in Fall 2016. Since its upload, it has received 7 views. For similar materials see Intro to Public Policy in Political Science at Florida State University.

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Date Created: 10/01/16
PUP 3002 Study Guide 09/27/2016 ▯ Stages of policy process  7 stages o Problem and Solution Identification  How do social issues become defined as social problems?  Once social issues have been defined as social problems how are solutions to those problems identified?  Stakeholders  Those who are affected by a policy problem  Policy Demands  The demands exerted by stakeholders on the political actors  Credible Action  The mechanism by which demands pressure leaders  Who gets what is determined by pressure  That said, ‘collective action problems’ exist among stakeholders  Connecting Problems to Solutions  The Policy Entrepreneur  Willing to exert time and effort  Has a stake in the solution  Ability to link their preferred solution to the ‘problem’ of others o Agenda Setting  The process by which formal institutional centers of power will take up and potentially act on a policy solution  Which demands do leaders actually decide to consider?  Factors that shape policy agendas:  Preferences of Formal Actors  Actors External to Formal Institutions (Advocacy Coalitions)  External Shocks o Policy Formulation  Who is really getting involved in this?  Who are the decision makers, who are offering advice/watching over it?  Gormley (1984): Salience and Technical Complexity o Alternative Formulation  Policy solutions are drawn from a set of competing alternatives  Whose ideas are considered?  Policy advocates  Private organizations subsidize government effort by providing information o Policy Selection and Adoption  Political actors make a policy decision  What do individual decision makers consider  Likely a combination of many factors  Political affiliation  Political capture  Their specific electorate  Getting it right  “Getting it right” often entails a cost benefit analysis  Cost benefit analysis – determines which policy provides the greatest benefits for the given costs  Steps:  Identify the project  List all benefits  Assign value (costs) to the benefits in a common metric (generally dollar amounts)  Apply discount rate  Sum Costs and Benefits  Choose policy whose gains most outweigh costs o Policy Implementation  Implementation is any activity related to carrying out a duly passed policy  Relies on a non-elected government officials---the bureaucracy  The bureaucracy  Makes formal rules  Enforces those rules  Provides services to clientele o Policy Evaluation  Policy evaluation is the systematic investigation of the effects of a policy on its intended social target, once enacted  How much of the original problem was solved?  Process should be ‘policy neutral ▯ Useful Heuristics  The use of the stages was to provide a heuristic for analysts to understand the types of decisions that are ongoing in the policymaking process. The stages reflected the pathways by which policies are identified, proposed, evaluated, implemented and terminated. While this heuristic to understand the policy process was useful early in academic research, its utility began to wane as critics weighed in on its rather unrealistic linear top- down assumptions of how policies are produced.  A heuristic demonstrating the pathways by which policies are identified, proposed, evaluated, implemented and terminated ▯ ▯ Rational Choice/Actor  What does it mean to be rational  A rational actor is one that pursues her or his interests, whatever those interests happen to be. This approach does not assume that all individuals are trying to maximize economic welfare. Some individuals some of the time aim to do this, but we do not assume that this is applies universally. In public policy, or politics, individuals are often trying to maximize their political standing. For a politician this may mean that one is trying to secure one’s hold on office. For a bureaucrat, this may mean that one is trying to maximize their bureaucratic power.  To make a rational choice, an actor must be able to discern the following  See all possible choices  Weigh the costs and benefits of all choices  Express and pursue what they deem best ▯ ▯ Necessary and Sufficient conditions  A necessary condition is one that is necessary for something else to occur: o Y does not happen unless X is present o If X is not present, Y will not happen o But, if X is present, Y may or may not happen  Example o X= Being 25 years old o Y= Being elected to congress o To be elected to congress you must be 25 o Not all 25 year olds are members of congress  A sufficient condition is one in the presence of which something else will always occur. o Y always happens when X is present. o If Y did not happen, X was not present. o But, if Y did happen, X may or may not have been present  Example o X=Rain o Y=Puddle o When it rains there will be puddles o Other things can cause puddles (dropping a soda, leaving the hose on, etc.)  A necessary and sufficient condition in whose absence the event will not occur and in whose presence the event must occur o Y only happens if and only if X is present. o Example: o X= Fire o Y= Smoke o When there is fire, there is smoke o Without fire, there is no smoke ▯ ▯ Probabilistic statement (Stochastic)  Not certain about the outcome  Probabilistic relationships allow for random chance to alter their outcomes. We refer to such relationships as being stochastic, meaning that some portion of their variability is simply random.  Social science tends to deal with probabilistic relationships  Probabilistic: If X, then likely Y o Why X may not lead to Y is due to random chance Example: Stealingà Arrested ▯ ▯ Deterministic statements  Outputs  A deterministic relationship is one that will always produce the same output from a treatment or initial state. A probabilistic relationship, on the other hand, is one that will produce an output from a treatment or initial state, with some probability.  Deterministic: If X, then always Y ▯ ▯ How to solve a prisoners dilemma  The players act alone (not together)  Each actor wants to maximize their utility  In light of what the other actor does, how can I maximize my payoffs?  Nash Equilibrium  set of strategies such that no player can unilaterally improve their position given the other player’s action. Essentially the Nash Equilibrium reveals both players’ best response given the other’s action.  ▯ ▯ Myopic  Shortsighted ▯ ▯ Ensure cooperation by 3 methods  The general solution to the cooperation dilemma essentially requires a revision to the basic Prisoner’s Dilemma game by altering the payoffs to the players. In other words, if we want people to behave differently, we have to incentivize them differently. We have to alter the payoffs of the game such that the individual no longer has an incentive to pursue the immediate benefit of defecting against the other player. o Repeated Interaction  An unrealistic expectation of the previous game is that it occurs only once  In many real-world scenarios games are played repeatedly over time  How much individuals value gains NOW, versus GAINS LATER gains later determines how effective future interactions will yield short term success o Norms  What if defecting generated costs?  Internalized norms  beliefs or values that that represent a form of psychological cost that the player feels they would suffer for engaging in defection. o Enforcement  Entails a ‘third party’ that has the ability to offer a punishment for defecting behavior.  Problems with Enforcement  We have to find a neutral third party to enforce  We have to pay the costs of enforcement  Accept that enforcement is often flawed or imperfect ▯ ▯ Tragedy of the Commons  Punishment mechanisms  Haight o Order is hard to achieve, easy to lose ▯ ▯ Free rider problem  “In economics, the free rider problem refers to a situation where some individuals in a population either consume more than their fair share of a common resource, or pay less than their fair share of the cost of a common resource”  ▯ ▯ Institutions  Formal rules  Relation to government and cooperation  A societal institution that organizes the legitimate use of power over those that reside within a set of geographic borders  Difference between ‘democratic government’ and ‘autocratic government’---Who is being served?  Government institutions help to overcome the sorts of collective action and free rider problems that are systemically problematic in social/market interaction  Governments solve societal issues by coercing individuals to act in a manner that is in accordance with social efficiency.  Government and Market Institutions may be able to solve these problems by o Assigning the number of actors o Structuring the order of play o Constraining certain behaviors o Imposing costs on certain behaviors o By doing so, institutions hope to ‘improve’ the resultant outcomes of societal interaction  ▯ ▯ Chp 1-3 ▯ ▯ Hobbes’s Quote  Life is nasty brutish and short ▯ ▯ Survive and adapt overtime in groups Group evolution  Altruism ▯ ▯ Identical groups of people ▯ ▯ Collective institutions  Collective Action  When groups engage in cooperative behavior to achieve a common good.  Force cooperation ▯ ▯ Different Goods  ▯ ▯ Positive Externality  Positive Externality: Society is getting something ‘good’ when individuals interact at a market setting. This ‘good’ is not being equated into the market demand function  People are ‘free-riding’ on your payments!  As such, the good tends to be underprovided  Governments may intervene to make this more efficient!  Producers: o Colleges o Want to maintain high rankings o Cannot lose money…. So they charge  Consumers o You! o You pay now so you can gain utility later o But seriously…. It’s expensive  Market Solution: o People that are willing to pay go to college o If students paid full value of school (education, staff, maintenance, etc), it would be really, really expensive o Not that many people would go. Those that do would tend to have more money initially, and then make even more money later  Positive Externalities: o Society wants an educated population. Smart people make cool stuff, keep people healthy, fund NGOS, pay higher taxes, etc. o Being a ‘successful’ country generally requires a fairly educated population….. Or oil  ▯ Negative Externality  In some instances, a market transaction between two parties may affect a third-party not involved in the transaction  If this third party is harmed or otherwise negatively affected by a transaction to which they are not a party, we refer to any costs borne by that party or parties as a negative externality.  Long story short: The market is failing to account for a cost. This ‘cost’ leads to inefficiency  Classic Example: Pollution  ▯ ▯ Market Failures  A market is any institution or operation wherein individuals can trade goods, services or information  When the price of a good or product is established via perfect competition under the condition that the demand for the good exactly equal the supply of the good, there is said to exist a market equilibrium price  Long story short: when equilibrium is met, the good being discussed is provided at efficient amounts.  How does gov’t respond ▯ ▯ Property Rights and Transparency  By property rights, we mean the exclusive right to determine how a resource or property is to be used. When property rights are absolute, the owner has sole and unlimited authority to make decisions over property access, use, exclusion and management, without interference from other parties. When property rights are relaxed, abrogated or violated, non-owners exercise a level of authority over property that they do not own.  First, property rights are necessary to encourage future investment in economic activity. Without guarantees of property rights protection, it would be rather difficult to convince a set of investors to risk their assets for the benefit of growing the economy.  Second, private property is also useful for resolving a variety of resource difficulties faced in society.  Third, private property is useful as a check against political power. By scoring off an area that the state or sovereign has no authority to manage, property rights delineate boundaries to the state. o Citizens can violate the property rights of other citizens, or the state can violate the rights of its citizens. If we include a person’s physical integrity as a dimension of their property rights as well as the actual possessions that they own, then murder, burglary or theft are all examples of one citizen violating another’s property rights. o Some rights violations are codified under criminal law, meaning that they are deemed to be acts which are, in a sense, offences against all of society, while others are codified under civil law, which deals more with disputes between private parties.  For example, citizens who harm the health or welfare of other citizens may be thought of as having violated the laws of society against pollution (potential criminal violations) as well as other citizens’ private property rights (potential civil violations). So pollution, whether in the realm of air, water or even noise, may, to the extent that it damages another person’s ability to enjoy their property, be cast as both a criminal and civil violation.. ▯ Consumer protection  How can we encourage citizens not to violate each other’s rights – to deter property violations? Clearly incentives often exist for one party to transgress another’s rights. Social philosophers like Thomas Hobbes proposed a solution in the form of a third party.  He famously argued that in the state of nature, without the protections afforded by a ‘common power to keep them all in awe they [individuals] will experience ‘continual fear, and danger of violent death; and the life of man, solitary, poor, brutish, and short.’ Seeking to avoid such a difficult existence, Hobbes laid the groundwork for ‘social contract theory,’ which considers imagining that individuals enter into a contract with a third party for their own protection.  Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government which impartially secures to every man whatever is his own.  ▯ ▯ Plott’s Fundamental equation  Preferences (behaviors) x institutions (structure) = political outcomes ▯ ▯ Causation  Causal Relationship  relationship between an input variable and an output variable, where an outcome variable has changed due to an exposure to an input variable  Input Variable=Independent Variable= X o What is doing the causing  Output Variable= Dependent Variable=Y o What is being explained ▯ ▯ Nash Equilibrium  Some one’s best strategy given the behavior of other actors  set of strategies such that no player can unilaterally improve their position given the other player’s action. Essentially the Nash Equilibrium reveals both players’ best response given the other’s action.  ▯ ▯ Supply and Demand  Demand: The quantity of water that consumers are willing to buy o What determines demand?  Price  Quality  Income  Price of substitutes/complements  Number of buyers  Expectations of future  Demand curve: graphical illustration of the relationship between quantity of a good and price. What does this relationship look like?  o At high prices there is low demand, and at low prices there is high demand. o What happens if the price increases? o Changes in price reflect moves along the demand curve  Supply: A microeconomic law that states, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa.  The law of supply says that as the price of an item goes up, suppliers will attempt to maximize their profits by increasing the quantity offered for sale. o What determines this?  Price  Production costs (labor, inputs)  Production substitutes  Expectations  Number of sellers  Taxes/subsidies o Supply curve: A graphical depiction of the relationship between price and quantity supplied o o When prices are high producers willing to make and sell more water. When prices are low producers not willing to make and sell water o What happens when price increases? Quantity supplied increases o Changes in price reflect movement along the supply curve  Market Equilibrium: Occurs at the price and quantity where Quantity Supplied = Quantity Demanded. There is no excess supply or excess demand. Occurs at the intersection of the supply and the demand curves o What happens if price is higher—People are not willing to pay this higher prices, so producers lower price o What happens if price is lower—People want more water at that price, but producers unwilling to provide at such a low price so they begin raising prices  Efficient resource allocation: When we say that a well-functioning competitive market in equilibrium is efficient, we mean that we cannot increase or decrease quantity produced and improve the total gains from trade (or welfare) of the market participants  Proposition: Well-functioning competitive markets are efficient  Well-functioning competitive market is efficient because the total gains from trade are as large as possible ▯ ▯ Principal Agent Problems  Governments may put a policy in place, but carrying out the policy is usually contracted out to other actors  Here a government must:  hire a set of agents to actually carry out the regulation  ensure that the agents act as ‘we’ want them to act  We must ask ourselves:  What do the principals want the agents to do  What do the agents want to do  How well can principals monitor and regulate the agents? o Government representatives are Agents o The constituency is their Principal o How well can the people control their agents? ▯ ▯


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